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Tuesday, December 23, 2014

Options Trader Alert #2014 - 42
BX Options Announces New Execution Algorithm for Penny Pilot Options and Pricing for Lead Market Makers

Category:

  • Pricing
  • System Impact

Markets Impacted:

Contact Information:

Resources:
Effective Friday, January 2, 2015, pending SEC approval, all Penny Pilot options classes will be executed utilizing the Size Pro-Rata execution algorithm on BX Options. Additionally, the following pricing modifications will apply to BX Options:

The following tiers will apply to Lead Market Makers in their specifically allocated options classes when adding liquidity contra to a Customer in Penny Pilot options.
Tier
  Qualification Description
LMM Fee to Add Liquidity when Contra to a Customer
Tier A
 Total Volume up to 0.20% of total industry customer equity and ETF option average daily volume ("ADV") contracts per day in a month
$0.40
Tier B
 Total Volume above 0.20% to 0.30% of total industry customer equity and ETF option ADV contracts per day in a month
$0.38
Tier C
Total Volume 0.31% or more of total industry customer equity and ETF option ADV contracts per day in a month
$0.37

"Total Volume" shall be defined as Customer, BX Options Market Marker, LMM, and Non-Customer volume in Penny Pilot Options and/or Non-Penny Pilot Options which either adds or removes liquidity on BX Options under Common Ownership. For purposes of determining Monthly Volume Tiers under this rule, any day that the market is not open for the entire trading day will be excluded from such calculation.

The term “Lead Market Maker” or “LMM” applies to a registered BX Options Market Maker that is approved pursuant to Chapter VII, Section 13 to be the LMM in an options class (options classes).

The select symbol pricing for BAC, IWM, QQQ, SPY, and VXX will be removed.

Options on BABA, GPRO, and NUGT will continue to use the Size Pro-Rata execution algorithm. All other non-penny option classes will continue to be executed utilizing the Price/Time execution algorithm.

For further details please visit the Pricing Page.

 

 

 

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